It's good news, with a touch of uncertain caution, in Federal Reserve Chair Jerome Powell's delivery of the central bank's semiannual monetary policy report to Congress on Wednesday.
Starting with the upside for once. "We believe that our policy rate is likely at its peak for this tightening cycle. If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year," Powell said. This is a more explicit embrace of eventual cuts that the Fed began in January.
But he then added that "the economic outlook is uncertain, and ongoing progress toward our 2 percent inflation objective is not assured. Reducing policy restraint too soon or too much could result in a reversal of progress we have seen in inflation and ultimately require even tighter policy to get inflation back to 2 percent."
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